Summary

• Ora Banda Mining has completed bookbuild for the capital raising of $51.7 million.
• OBM has received substantial support from existing as well as new domestic and international investors.
• OBM has plans to recommence the production at Davyhurst gold project in Q1 CY2020, which shall be funded from the fund arranged through capital raising.
• Post the announcement, OBM stock was up by ~14%.

Gold exploration and development company, Ora Banda Mining Limited (ASX:OBM) announced a capital raising on 3 July 2020 to fund and accelerate the ongoing exploration programs across the Company’s 1,350km2 prospective landholding, especially to re-start production at its Davyhurst gold project.

Previous Update: Ora Banda Announces $55 Million Worth of Capital Raising to Accelerate Recommencement of Production at Davyhurst Project

In connection with this capital raising, OBM has received firm commitments as follows:

• approximately $40 million for its Placement to institutional investors (Placement), and
• approximately $11.7 million for the institutional component of its 1 for 9 accelerated non-renounceable pro-rata entitlement offer (Institutional Entitlement offer), of new fully paid ordinary shares in OBM.

In totality, the capital raising, upon completion shall allow the Company to have gross proceeds of $51.7 million at $0.23 price per new share. In addition to this, the retail component of the entitlement offer shall raise a further $3.3 million, bringing the total proceeds from Placement and entitlement offer to $55 million.

Related: Ora Banda Reports 46% Increase In The Underground Mineral Resource At Riverina Project

At present, the Company had completed the Institutional Entitlement Offer and raised $11.5 million along with binding commitments for $44 million Placement amount. OBM looks forward to issuing new shares under tranche 1 of Placement, and Institutional Entitlement offer tentatively on 15 July 2020.

Subsequent to the issue of New Shares under Tranche 1 of the Placement and the Entitlement Offer, relevant interest of Hawke’s Point, a major shareholder shall reduce from 44.99%. However, Hawke’s Points’s relevant interest in OBM shall increase to up to 47.13% if shareholders approve Tranche 2 of the Placement.

The existing shareholders of OBM and several new international and domestic investors have shown strong support for the Placement as well as Institutional Entitlement offer. Moreover, OBM is optimistic that this shall help the Company to add several new high-quality institutional investors to its share register.

OBM is encouraged with the solid support of its largest shareholders as it intends to raise the capital necessary to resume gold production at Davyhurst. More importantly, the capital raising further makes sure that OBM remains debt-free as it proceeds towards gold production in January 2021.

Related: Ora Banda Mining reports 60% upgrade in Davyhurst Gold project Ore Reserve; stock mounts 8.51%

OBM has scheduled a general meeting of its shareholders to be held in late August 2020.

Retail Entitlement Offer

7 July 2020 is the record date for shareholders having registered address in Australia, or New Zealand can only participate. These shareholders should not have applied for new shares under the Institutional Entitlement offer of the company. Remaining terms of the offer such as per share price and 1 new share for every 9 existing shares are similar to Institutional Entitlement offer details.

Key dates in relation to the Placement and Entitlement Offer are given in the image below:

(Source: Company's Report)

OBM expects that the Company’s cash balance combined with the proceeds from the equity raising shall provide substantial funds to meet the requirements of capital costs and working capital for the re-commencement of production at the Davyhurst Gold Project.

Other than this, OBM also looks forward to utilising the funds for the following activities:

• Site infrastructure, including tailings storage facility, road maintenance and site accommodation
• Restoration and recommissioning of the processing plant
• First fills and spare parts
• Pre-production Mining Costs
• Exploration Activities

Division of amount as follows:

(Source: Company's Report)

OBM had also finalised a Definitive Feasibility Study for re-starting the production at Davyhurst Gold Project. The study indicated that a fast and low-capital route could be embarked on to attain sustainable gold production at the project. The production at the project is expected to begin in the first quarter of CY21.

Further details at: Ora Banda Finalises DFS at Davyhurst Project; Results Indicate Strong Economic Returns

Following the announcement of capital raising on 07 July 2020, OBM stock settled increased by 17.64% and closed at a price of $0.300. OBM has a market capitalisation of $ 150.52 million and has increased by 157.58% in the last three months till 02 July 2020.